This application is submitted in response to the RFA entitled "The Implications of Sustained Low Fertility," NIH-NICHD-PRGB-79-1. The proposed project is a theoretical treatment of the economic consequences of low or declining fertility based on the analysis of single sector neoclassical growth models with age-structured populations. The project will develop an analytic synthesis of the existing body of scattered and apparently disparate research on the topic. It will extend the analysis in various ways. The household life cycle savings model will be formally related to the population growth rate. The utility from children will be incorporated in the model, and thus externalities arising from intergenerational transfers and other demographic effects may be studied. Welfare changes during transitional stages will be appraised. The dynamic behavior of the system under alternative endogenous fertility specifications will be studied.